This invention, in general, relates to wagering with limited risk in an online environment. More particularly, this invention relates to rendering returns with limited risk to users on an online platform.
Most online platforms make money by charging a commission which is calculated as a percentage of net winnings for each bettor on each event, or market. Users whose activities have traditionally been restricted by bookmakers have found these sites a boon since the users are now able to place bets of a size unrestricted by the exchange. The odds available are usually better than those offered by bookmakers, notwithstanding the commission charged, since the middle man is eliminated. In various wagering establishments throughout the world, bookmakers provide wagering at fixed odds, i.e., set prices. The bookmakers then try to “balance their book” by making other bets to cover previous commitments. Therefore, this process involves risk; not only are the bookmakers not able to guarantee a particular rate of commission but can actually lose money on an event and even on a series of events.
A system that provides fixed odds is often referred to as a “fixed odds system”. Many fixed odds systems have been proposed over the years. They have been computerized and have operated on the same principles as those used by bookmakers. Typically, these fixed odds systems use a pool of fixed price bets only. This pool is separate from the traditional parimutuel variable price totalized pool and provides fixed odds by attempting to balance the book in much the same way as a bookmaker would do. Consequently, the fixed odds systems cannot guarantee a particular rate of commission and have a risk of loss just like with that of a bookmaker. Inevitably the operation would lead to traditional problems such as a lesser rate of return than that provided by a parimutuel totalized system.
Hence, there is a need for an online platform to allow users to wager on an event with unrestricted returns and without fixed odd risk. There is also a need of providing wagering on the online platform with a limited risk of only the initial investment.